Chipotle (CMG)
Posted: Tue Oct 27, 2015 7:28 amnot vested
Restaurant Stocks: Chipotle — Dig In
Earlier in October, Chipotle (CMG) reported earnings of $4.59, below analysts’ estimates, and CMG sold off to the tune of 8% overnight.
Many argue that Chipotle’s rapid growth, which drove CMG stock higher for 10 years, is now over; the Mexican restaurant chain simply has no more space to grow.
But a quick look under Chipotle’s hood suggests that CMG stock still has plenty of upside. And that, of course, means you can use the recent pullback to dig in to Chipotle stock.
ROE for shareholders is among the highest in the business with a 12-month ROE of 25%. Those kinds of numbers come from healthy profit margins and almost no debt. Thus, Chipotle could decide to take on debt to accelerate its expansion without any significant risk.
CMG Stock has a strong earnings record. Over the past 10 years, net income increased on average by 33% per year. One quarter’s earnings miss doesn’t mean the picture has changed. CMG Stock still enjoys strong profitability and higher growth than most of its peers.
Source: Investor Place
Restaurant Stocks: Chipotle — Dig In
Earlier in October, Chipotle (CMG) reported earnings of $4.59, below analysts’ estimates, and CMG sold off to the tune of 8% overnight.
Many argue that Chipotle’s rapid growth, which drove CMG stock higher for 10 years, is now over; the Mexican restaurant chain simply has no more space to grow.
But a quick look under Chipotle’s hood suggests that CMG stock still has plenty of upside. And that, of course, means you can use the recent pullback to dig in to Chipotle stock.
ROE for shareholders is among the highest in the business with a 12-month ROE of 25%. Those kinds of numbers come from healthy profit margins and almost no debt. Thus, Chipotle could decide to take on debt to accelerate its expansion without any significant risk.
CMG Stock has a strong earnings record. Over the past 10 years, net income increased on average by 33% per year. One quarter’s earnings miss doesn’t mean the picture has changed. CMG Stock still enjoys strong profitability and higher growth than most of its peers.
Source: Investor Place